Share your investing goal

I thought I'd use my 3000th post to share my current goal and status.

Current situation: Age 37, well paid career, have PPOR + 8 IPs.

Goal: To have $150,000 per year investment income in 2005 dollar terms, pre-tax.

Method: Buy a bunch of IPs, pay down PPOR, use extra cashflow to pay down some debt, then when ready to retire start withdrawing equity (slowly and over a period of some years) to buy well yielding blue chip shares.

Status: Well on the way. Property portfolio now comfortably cashflow positive, I'm earning lots more than I spend so paying down (the new) PPOR very quickly, enjoying the occasional holiday, enjoy my job. Originally wanted to reture at age 45, but thinking I'll do several short term consultancies each year to provide some extra income for holidays and fun stuff, working maybe 6-8 montsh each year.

My biggest achievement, though, is a happy marriage and two wonderful children.

All in all, I have nothing to complain about.
 
I thought I'd use my 3000th post to share my current goal and status.

Current situation: Age 37, well paid career, have PPOR + 8 IPs.

Goal: To have $150,000 per year investment income in 2005 dollar terms, pre-tax.

Method: Buy a bunch of IPs, pay down PPOR, use extra cashflow to pay down some debt, then when ready to retire start withdrawing equity (slowly and over a period of some years) to buy well yielding blue chip shares.

Status: Well on the way. Property portfolio now comfortably cashflow positive, I'm earning lots more than I spend so paying down (the new) PPOR very quickly, enjoying the occasional holiday, enjoy my job. Originally wanted to reture at age 45, but thinking I'll do several short term consultancies each year to provide some extra income for holidays and fun stuff, working maybe 6-8 montsh each year.

My biggest achievement, though, is a happy marriage and two wonderful children.

All in all, I have nothing to complain about.

Great attitude. Well done!
 
Method: Buy a bunch of IPs, pay down PPOR, use extra cashflow to pay down some debt, then when ready to retire start withdrawing equity (slowly and over a period of some years) to buy well yielding blue chip shares.
Excellent plan.

Originally wanted to reture at age 45, but thinking I'll do several short term consultancies each year to provide some extra income for holidays and fun stuff, working maybe 6-8 months each year.
I think that's important - a sudden transition from 9-5 job to retirement with excess disposable income isn't the best option IMO. Far better to semi-retire & work if/when necessary while income continues to increase towards your target passive income. While balance is important, time is the most valuable thing we have, not excess disposable income.
 
Originally Posted by VYBerlinaV8 View Post
Method: Buy a bunch of IPs, pay down PPOR, use extra cashflow to pay down some debt, then when ready to retire start withdrawing equity (slowly and over a period of some years) to buy well yielding blue chip shares.

This may be a dumb question but when you withdraw equity wouldn't you have to have to pay interest on the amount taken?
So that you would be expecting your shares to return a higher % than the interest you are being charged?

Thanks
 
Originally Posted by VYBerlinaV8 View Post
Method: Buy a bunch of IPs, pay down PPOR, use extra cashflow to pay down some debt, then when ready to retire start withdrawing equity (slowly and over a period of some years) to buy well yielding blue chip shares.

This may be a dumb question but when you withdraw equity wouldn't you have to have to pay interest on the amount taken?
So that you would be expecting your shares to return a higher % than the interest you are being charged?

Thanks

Not a dumb question, a great question in fact.

My plan is to withdraw equity at times when I appears that I can get a better post-tax yield on the equity withdrawn by investing it in high yielding shares.

For example, if I withdraw $100,000, which I then invest in a large bank that provides fully franked dividends, then I might incur 5.5% interest on the equity withdrawn, but make 6% divident (fully franked) on the shares.

Of course, I'll have time on my side, but this will allow me to gradually diversify into blue chip shares and little or no real cost to myself, while maintaining my investment income.

There'll be some cashflow to think about, but I'm fortunate to have a well paying job that largely solves the problem for me.
 
Not a dumb question, a great question in fact.

My plan is to withdraw equity at times when I appears that I can get a better post-tax yield on the equity withdrawn by investing it in high yielding shares.

For example, if I withdraw $100,000, which I then invest in a large bank that provides fully franked dividends, then I might incur 5.5% interest on the equity withdrawn, but make 6% divident (fully franked) on the shares.

Of course, I'll have time on my side, but this will allow me to gradually diversify into blue chip shares and little or no real cost to myself, while maintaining my investment income.

There'll be some cashflow to think about, but I'm fortunate to have a well paying job that largely solves the problem for me.


So wouldn't it be better to have you PPOR debt free and your investments on IO and any surplus put into stocks or index funds now?
Then in say 10 years you could then start to withdraw money from any appreciation to buy further equities?
It just seems strange to put any surplus into the properties now to later take it out again.
 
So wouldn't it be better to have you PPOR debt free and your investments on IO and any surplus put into stocks or index funds now?
Then in say 10 years you could then start to withdraw money from any appreciation to buy further equities?
It just seems strange to put any surplus into the properties now to later take it out again.

I still have debt on my PPOR because I just bought (and renovated) a new one.

Some of my IPs are IO, but because of my cashflow and rate of savings I'm happy to leave them like that (a couple will be owned outright in around 10 years).

I won't consider myself genuinely retired until my PPOR is paid off, which I suspect will take 8 or so years.

I'll also tip a bit of my working income into stocks when working part time in semi retirement.
 
Current Status:

I'm 25 and my gf is 24.

Exchanged for OTP (investment property) for $550k back in Sep 2012, due to settle mid 2014. Loan will consist of $400k fixed 3 years / $95k variable

Exchanged for second investment property for $610k over the weekend (Sep 2013) settling in 6 weeks. Loan will consist of $400k fixed 3 years / $88k variable

Have no other debts, credit card is paid on time every month so dont really consider it as a debt.

Also have $60k managed funds and $4k in a speccy share. not planning to sell until mid 2015.

Goals:

Aim to have 1:1 ratio of variable loan debt and offset balance for both property's.

That is our investment goal. Plan is to keep the remaining two fixed loans on interest only until their 3 year period matures, split it again and repeat by aiming to have 1:1 ratio of variable portion(s) with offset accounts.

Long term is to have both ppty's paid off in full and refinance into partners name.

Looking to really save up next for that engagement ring, wedding kids etc.
 
You're 25 and have a Million dollars of debt, half of it non deductible? Come on.

How is it non deductible if both his places are IP's?

What is the point of your post anyway? I'd love to be 25 and have a million debt. I'm slightly older and have less debt :(
 
How is it non deductible if both his places are IP's?

What is the point of your post anyway? I'd love to be 25 and have a million debt. I'm slightly older and have less debt :(

Ahh whoops missed that the first property was an investment property as well. I guess I'd just be very nervous with that much debt, but if Reckless and his lady are both in stable high paying jobs I guess that minimises the risk.
 
Age: almost 30
Started investing: 2-3 years ago
Goal: replace my income so i can choose if i want to work.
Strategy:invest in residential currently, look into commercial in a few years time.
Where I'm at now: 2 units + 1 house major regional in vic, 1 house outter melb (will be PPOR in a few years time). i have a pretty high paying job so that helps out a bit with repayments and saving.
Where to from here:pay off some bad debt to free up some cash flow and pay down some of the loans to do the same. havent used any equity for any purchases. will get into shares again.

any advice on 'where to from here' would be great. kinda stuck in a rut i think.
 
Age: 29 next month
Started investing: Age 24 purchased PPOR in 2008, turned into an IP 2.5 years ago and rented while I saved for a PPOR. New PPOR settles this week. LVR's currently around 75-80%.
Goal: Never having to work again if I choose not to. Don't have a retirement age set.
Strategy: Buy every few years or less, renovate & hold with space to subdivide at rear, granny flat or knock down and build mulitple properties. This is currently around the Perth around until I get use to other areas.
Where I'm at now: 1 IP & PPOR I'm about to renovate to access easy equity.
Where to from here: Renovate PPOR, save cash for next IP while looking for next IP.
 
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Ahh whoops missed that the first property was an investment property as well. I guess I'd just be very nervous with that much debt, but if Reckless and his lady are both in stable high paying jobs I guess that minimises the risk.
Your debt levels and your response to them change as you go.

Sorta like the little kid afraid of the little slide, then they tackle the slightly bigger one, and so on.

I have no problem with debt levels - as long as there is income to support it.

Getting a large chunk of debt across one or two properties is a bit dangerous, imo.

But it also depends on your PAYE, where the properties are, the rent return etc.
 
Ahh whoops missed that the first property was an investment property as well. I guess I'd just be very nervous with that much debt, but if Reckless and his lady are both in stable high paying jobs I guess that minimises the risk.
Its very difficult for most people to save a couple of million $$ to retire on and live a comfortable lifestyle. Most of us average investors have to gear to get there.

Manage your risk against your profile and goals and don't let fear hold you back. Low risk low return, high risk, high return.
Most are somewhere in-between.
 
Had PPOR & 5 IPs worth around $1m but highly geared around 2-3 years ago, then the market crashed - I sold 3 IPs (lost money). Invested in own business after leaving a F/T job - lost money, then almost lost the lot 1 year ago...now have PPOR & 2 IPs but zero equity and starting over - in a F/T job again since Dec last year and saved about $25,000 to date and looking to buy again early 2014 allowing for a sizable buffer in place - income at about $80,000 now & aiming for $120k+ by this time next year. Wasted so much money in the past 3 years when I should have been more stricter in budgeting, etc. Anyway, what's gone is gone. On the positive side, I have quite the education of what not to do now!
 
beachy,

Good on you for keeping on, you've had some setbacks but you'll get there in the end!

Had PPOR & 5 IPs worth around $1m but highly geared around 2-3 years ago, then the market crashed - I sold 3 IPs (lost money). Invested in own business after leaving a F/T job - lost money, then almost lost the lot 1 year ago...now have PPOR & 2 IPs but zero equity and starting over - in a F/T job again since Dec last year and saved about $25,000 to date and looking to buy again early 2014 allowing for a sizable buffer in place - income at about $80,000 now & aiming for $120k+ by this time next year. Wasted so much money in the past 3 years when I should have been more stricter in budgeting, etc. Anyway, what's gone is gone. On the positive side, I have quite the education of what not to do now!
 
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